Wal-Mart scales back US store growth
NEW YORK (AP) — Wal-Mart Stores Inc. plans to dramatically scale back expansion of its U.S. supercenters next year, while investing more in e-commerce.
The company also is conducting a major review of its U.S. Wal-Mart business and will update investors on its plans early next year, executives told investors at the retailer's annual analyst meeting on Wednesday.
The review comes as it aims to revive business at Wal-Mart discount stores, which have not recorded growth in sales at locations open at least a year for six straight quarters. The business, which accounts for 60 percent of the company's total sales, have been plagued with broader issues, including a slowly recovering economy that hasn't benefited its low-income shoppers. But the company has also been tripped up by its own mistakes like being out of stock on items shoppers want.
"There's no excuse for us not to be doing better," Doug McMillon, the company's new CEO and president who took over the reins from Mike Duke in February, told analysts. While he said that there are obstacles like health care costs and economic issues, the company needs to be doing a better job at keeping items in stock and speeding up checkout lines. It also needs to get better with its prices. At the same time, Wal-Mart will increase its investment in e-commerce.
"I really believe our future is bright," he said. "There are so many ideas percolating around."
Wal-Mart is scaling back supercenter openings to 60 to 70 next fiscal year, down from an expected 120 this year.
As for its smaller stores, the company also plans to add 180 to 200 Neighborhood Markets next year, from 170 stores scheduled for this year. It's reducing growth of its smaller Wal-Mart Express stores. It plans to open 20 stores next year, down from the expected 70 this year. Wal-Mart Express stores are about 12,000 square feet, while the Neighborhood Markets average about 40,000 square feet.
It's also rebranding Wal-Mart Express stores to Neighborhood Markets while reducing its offerings in seldom-purchased items such as shower curtains and stocking more items that shoppers want every day such as diapers.